Proposal not to impose special consumption tax on gasoline and air conditioners

Considering that gasoline and air conditioners are essential goods, some National Assembly deputies proposed not to subject these items to Special Consumption Tax.

Vice Chairman of the National Assembly Nguyen Duc Hai speaks. (Photo: Doan Tan/VNA)

On the morning of March 26, full-time National Assembly deputies discussed the draft Law on Special Consumption Tax (amended).

Considering that gasoline and air conditioners are essential goods, some delegates proposed not to subject these items to Special Consumption Tax.

Giving his opinion on the discussion, delegate Hoang Van Cuong (Hanoi) said that the goal of levying Special Consumption Tax is to change consumer behavior, limit consumption conditions for products that are harmful to health, have negative impacts on the community and change that behavior to a more beneficial alternative consumer product.

National Assembly delegate of Hanoi city Hoang Van Cuong speaks. (Photo: Doan Tan/VNA)

The Special Consumption Tax also sets the target of budget collection "but budget collection is not the main target, the main target is behavior." Therefore, the delegate said that in this draft of the Special Consumption Tax Law (amended), there are still things that need to be clearly defined, and it is necessary to consider whether the target and behavior are correct "or still stopping at the target of budget collection."

Citing the fact that this draft Law still continues to include air conditioners in the subject of consideration and research for the option of "restricting the scope," meaning that air conditioners are still taxed, delegate Hoang Van Cuong expressed his opinion: Currently, air conditioners are truly essential consumer products, there is no substitute, and no matter how much the tax rate is raised, they still have to be used, and if certain subjects are restricted, behavior will not change.

"I think it is necessary to remove air conditioners from the list of subjects subject to Special Consumption Tax," delegate Hoang Van Cuong emphasized.

National Assembly delegate of Dak Nong province Nguyen Truong Giang speaks. (Photo: Doan Tan/VNA)

Agreeing with the viewpoint on taxable subjects, delegate Nguyen Truong Giang (Dak Nong) also said that tax imposition must be in accordance with the nature of Special Consumption Tax.

Gasoline is also an essential commodity and its use cannot be restricted. More importantly, gasoline is subject to both Special Consumption Tax and Environmental Protection Tax. If we determine that using gasoline affects the environment, we can increase the environmental protection tax but not the Special Consumption Tax.

Delegate Nguyen Truong Giang also agreed that special consumption tax should not be imposed on air conditioners. Because air conditioners are essential goods, and are being applied with technologies that save electricity.

"There should be no special consumption tax on gasoline and air conditioners with 90,000 BTU or less," the delegate said.

At the conference, a delegate said that after consulting with alcohol and beer production and trading enterprises on the draft Law on Special Consumption Tax (amended), enterprises basically agreed with increasing the special consumption tax on alcohol and beer products, but the issue of how much to increase, the roadmap and how to apply it, needs to be carefully and scientifically assessed, especially in the context that beverage production and trading enterprises have recently been negatively affected by the COVID-19 pandemic as well as other unwanted impacts and influences that have reduced output and revenue.

The current situation of beverage businesses is very difficult, needing help and support to recover, rise, survive and develop. This time the increase in Special Consumption Tax needs to be carefully considered.

Previously, reporting on some basic contents in explaining, receiving and revising the draft, the Standing Committee of the Economic and Financial Committee said that there was a proposal to add non-taxable objects such as gasoline and air conditioners because these are essential goods.

Meanwhile, in Vietnam, gasoline has been subject to special consumption tax since 1995. To encourage the use of biofuel, the Law on Special Consumption Tax has stipulated a preferential tax rate of 8% for E5 gasoline and 7% for E10 (lower than the 10% tax rate applied to mineral gasoline).

This provision is consistent with the objective of the Special Consumption Tax, which is to regulate consumption of goods that need to be used economically and in accordance with international practices. In addition, in the context of environmental pollution and climate change being global issues, the commitment of the Vietnamese Government at the COP26 Conference to achieve net emissions of "0" by 2050, along with other solutions, the collection of Special Consumption Tax on gasoline (including E5 and E10 gasoline) as it is now is appropriate, contributing to reducing emissions and orienting economical consumption.

Therefore, the receiving and explaining agency requests to keep it as the draft law. Regarding air conditioners, the Standing Committee of the Economic and Financial Committee stated that the collection of Special Consumption Tax on air conditioners with a capacity of 90,000 BTU or less is being applied stably to raise awareness about limiting consumption as well as orienting consumption to save electricity and protect the environment.

Deputy Minister of Finance Cao Anh Tuan speaks. (Photo: Doan Tan/VNA)

Also at the conference, to clarify this opinion, Deputy Minister of Finance Cao Anh Tuan said that the imposition of special consumption tax aims to regulate consumer behavior.

Previously, air conditioners were considered luxury goods that should be subject to special consumption tax to regulate and adjust consumer behavior. However, now that they are common goods, families should take their opinions into account. The Drafting Committee will review with relevant agencies to have appropriate regulation plans.

Regarding gasoline, Deputy Minister Cao Anh Tuan said that this tax has been applied for a long time and many countries also impose Special Consumption Tax (collected as a percentage) and Environmental Protection Tax (collected as an absolute tax).

Furthermore, the tax rate on biofuel is being proposed to be collected at a lower rate to encourage the use of this type of gasoline./.

Source